Norfolk Southern Corp. reported Wednesday second-quarter profit that came up shy of expectations while revenue beat, as rising costs led to lower margins. The railroad operator’s stock was still inactive in premarket trading. Net income was unchanged at $819 million but earnings per share increased to $3.45 from $3.28 as weighed average shares outstanding fell to 237.5 million from 250.0 million. The FactSet consensus was for EPS of $3.47. Revenue grew 16.1% to $3.25 billion, above the FactSet consensus of $3.13 billion. Total railway operating expenses rose more than revenue, by 21.3% to $1.98 billion, to lower income from railway operations as a percentage of revenue to 39.1% from 41.7%. As labor shortages have been an issue for railroad companies, Norfolk provided a train and engine (T&E) workforce update. The company said qualified T&E of 6,966 in the second quarter was down from 7,488 a year ago, but increased to 7,190 in July. There were 988 conductor trainees in the second quarter, up from 118 a year ago. The stock has lost 6.8% over the past three months, while the Dow Jones Transportation Average has declined 8.8% and the Dow Jones Industrial Average has slipped 4.6%.
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